Solomon Lew blames 'inept' Labor for retail downfall

Billionaire businessman and retail mogul Solomon Lew believes the former Gillard-Rudd governments were ‘‘inept’’ in their handling of the mining boom and ‘‘bumbled’’ their way through the good times to the great detriment of the nation’s retail sector.

The comments are some of the strongest aimed at the outgoing ALP government by any Australian business leader.

Mr Lew, who is chairman of fashion retail group Premier Investments and a former Reserve Bank board member, said the ALP federal government had left a poor legacy with even the best retailers suffering.

‘‘I think the legacy of the former government in its inept handling of the mining boom at the expense of the non-resource sectors continue to impact on retail given the employment numbers last week, the continued strength of the Australian dollar and the fragility of consumer confidence,’’ Mr Lew said.

Last week, ABS data showed that the unemployment rate climbed to a post-global financial crisis high of 5.8 per cent, surprising some markets and economists.

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Mr Lew, one of the richest men in Australia through his investments in retail businesses, said the Gillard and Rudd government’s bickering and day-to-day political manoeuvring left the retail sector hanging ultimately feeding higher jobless figures

‘‘If you ask me I’d say to you the former government’s complete disregard for the non-resource sector of the economy while it sort of bumbled its way through the mining boom is a major contributor to the poor health state of the retail sector.

‘‘Even good retailers found it very very hard, and it almost feels that what the new government needs to concentrate on is [being] medical people, apply what you would call CPR.

‘‘C stands for confidence, P for productivity and R stands being responsible.’’

Mr Lew’s strong views about the complacency of the former ALP government was backed up by Premier chief executive and former David Jones boss Mark McInnes who laid the blame for 80,000 job losses since 2008 squarely at the feet of former Prime Ministers Julia Gillard and Kevin Rudd.

‘‘80,000 Australians have lost their job in the last five years as a direct result of poor government policy and as [Solly Lew] said [its] not investing in the retail sector whilst taking for granted the mining sector,’’ Mr McInnes said.

80,000 Australians have lost their job in the last five years as a direct result of poor government policy.

He and Mr Lew again called on the new Abbott government to eliminate the $1000-GST free threshold on online goods bought from overseas.

‘‘And the largest component of that [retail job losses] is by allowing consumers to buy online goods that we have to pay duty and tax for and that they don’t have to, we are the only western country in the world that allows that and it’s cost thousands of Australians their jobs and we would urge the new government to look at that quick haste,’’ Mr McInnes said.

He added retailers were also suffering from a ‘‘draconian’’ industrial relations system set up by the previous government.

The acerbic comments were made this morning as Premier Investments, which owns a stable of popular fashion brands such as Just Jeans, Dotti, Portmans and Smiggle, more than doubled its full-year profit, but warned it expected retail conditions to remain challenging in Australia.

Premier reported that full-year net profit rose to $174.5 million in the year to July 27, up from $68.3 million during the previous year.

Premier shares were down 0.5 per cent to $8.34 at around 12.30pm.

The result included a one-off $105.2 million after tax reclassification, to include Premier’s investment in kitchen appliances maker Breville from early March.

Total sales across the group’s fashion brands rose 0.9 per cent to $836.4 million. Like-for-like sales fell 1.8 per cent.

Premier also announced plans today to expand Smiggle into Britain following a recent successful push into South East Asia.

‘‘We think there are very few listed retailers in the country that have brands capable of expansion as we do,’’ Mr McInnes said, ‘‘so from our perspective we have two growth brands, most other listed retailers don’t have that, one of those of that has significant retail expansion being in Smiggle and potentially Peter Alexander.’’

Premier would also work hard on its core turnaround brands such as Portmans which suffered during the retail downturn.

Jay Jays, its youth fashion brand suffered, an 11.1 per cent sales drop, while Just Jeans sales slid by 3.3 per cent as Jacqui E ladies wear sales fell by 2.3 per cent.